Former Albertan Michelle Mungall became B.C.’s new energy minister Tuesday, turning the page on another intriguing chapter in the long-running saga of building an LNG industry in Canada.

So far, the story on Canadian LNG development would more accurately be titled The Odyssey than Great Expectations.

The dreams of former Liberal premier Christy Clark regarding the liquefied natural gas sector were enormous, with bold promises of three new plants, up to 100,000 new jobs and billions of dollars in private-sector investment by 2020.

The reality, however, has been less grand: one small project has received the go-ahead to date.

Before the new NDP cabinet was sworn in Tuesday, a report from the National Energy Board was released that accurately describes the hard road that has prevented Canada’s LNG sector from taking off.

It also details many of the reasons why LNG liquefaction terminals could eventually dot Canada’s west coast, providing an outlet for the growing amounts of natural gas being produced across Western Canada.

“Canada is a late entrant to global LNG markets and the next several years will be critical to the development of the Canadian LNG industry,” the report states.

Colette Craig, a market analyst at the energy board, points out the Canadian industry has several advantages it can build on, including huge supplies of relatively low-cost gas.

With advances in technology and fracking, gas reserves in the country total an eye-popping 1,087 trillion cubic feet. More than one-third comes from the Montney formation in northwest Alberta and northeast British Columbia.

The NEB expects Canadian gas production will rise by 18 per cent by 2040, even as booming U.S. production crowds out imports into that country.

Another advantage for Canada is the relatively close proximity of west coast terminals to key Asian markets in China, Japan and India; Canadian plants would be about 5,000 nautical miles closer than those on the U.S. Gulf Coast.

Today, there are 24 separate LNG project proposals in Canada, with 18 of those to be built on the B.C. coast.

However, only the $1.6-billion Woodfibre LNG project near Squamish has received the green light from its owners.

Other larger developments, including the Pacific NorthWest LNG proposal and the Shell-led LNG Canada project, are awaiting final investment decisions.

“There is still potential for some of these projects to come to fruition,” said Craig.

Yet several hurdles stand in front of Canada’s LNG aspirations.

This includes the high capital costs needed to build new greenfield projects in Canada. Projects in Western Canada also need pipelines to connect gas supplies to liquefaction plants.

Most importantly, the falling price of LNG in recent years has taken a toll on project economics, with a global glut of product hanging over the market.

Just last year, four new LNG projects — including three from Australia — with a combined capacity of 3.3 billion cubic feet per day began operating.

Ian Archer, with energy consultancy IHS Markit, believes two larger Canadian projects will eventually get built before 2035. Given the oversupply in the market, he’s skeptical any developments will be built within the next decade.

“This is an industry on hold. This is an industry waiting for better days, to be completely blunt about it,” he said.

“Those better days will come, but … it’s a question of market timing and we’re just not there.”

Another complication is what’s happening south of the border.

The Sabine Pass export terminal in Louisiana began operating in May 2016, with a capacity of 1.2 billion cubic feet per day. Four other projects are now under construction in the U.S., where natural gas production is expected to soar by 40 per cent by 2040.

“The U.S. has beaten us to the punch,” said Mark Pinney, the Canadian Association of Petroleum Producers’ manager of natural gas markets and transportation.

Pinney believes that by 2024 or 2025, demand will have caught up with supply and another window will open for Canadian LNG projects.

BC LNG Alliance president David Keane points out there’s a huge economic win for the entire country if the sector takes off: a $7.4-billion-a-year increase in the national economy for 30 years, and 65,000 new jobs, if two larger and one smaller LNG projects are eventually built.

Keane thinks global LNG supply and demand will return to balance around 2022, which means projects in B.C. would need to be ready to move ahead in the 2018-2019 time frame.

“Contrary to what people may be hearing from various pundits, the LNG industry in British Columbia is not dead,” he said.

All of these tangled issues will eventually fall into the lap of the new NDP government in B.C.

Mungall, who ran unsuccessfully for the Alberta NDP in 2001 in the riding of St. Albert before moving to Nelson, has taken over as the province’s minister of energy, mines and petroleum resources.

Let’s hope she has more success penning the next chapter in the story of Canada’s LNG development than her predecessors.

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